Implementation of new leasing standard (IFRS 16)

• Management of the national project team of Deutsche Postbank AG, approx. 10 FTE

• Ensuring compliance, i.e. implementing the new accounting standards for lease accounting for financial years from January 1, 2019 at the latest
• Specific expertise in project and change management and, in particular, personnel resources were lacking in order to successfully implement the project
• Close cooperation with the management of the joint project under the leadership of Deutsche Bank AG

• Deutsche Postbank AG was about to be merged with the parent company Deutsche Bank AG

• Advisor to the Finance, Accounting and Tax Policy Department; formally Deputy Project Manager

• Ensuring that the accounting requirements of IFRS 16 Lease (or US GAAP ASC 842) are met
• Selection and implementation of lease accounting software that ensures accurate lease accounting and reporting in accordance with IFRS/German GAAP (HGB)
• Best possible integration of the new “Lease Application” into the existing IT system landscape and company organization
• Realization of the most cost-effective solution, taking into account implementation costs, current operating and transaction costs
• Implementation of effective internal controls across the entire E2E leasing process
• Main contact person for the group auditor as part of the project-related audit

• Definition of roles and responsibilities in the project
• Setting up a project organization

Cross-divisional workshops

• Creating an understanding of the new accounting policy
• Collection of internal company information

Transparency

• Creation of transparency for all existing leasing/rental contracts (“completeness”)
• Creation of reliable and quality-assured data

Project planning

• Creation of detailed project planning, taking restrictions into account
• Preparation of a project budget and presentations for various decision-making bodies

Contract management processes

• As-is analysis of existing processes according to clusters – e.g. real estate, vehicles, IT
• Modeling of the future leasing process

Optimization of the IT target structure

• Analysis of the existing IT system landscape, processes and data availability
• Advice on the design of the target architecture model (TAM)

Interfaces

• Identification of interfaces to all affected company divisions
• Technical connection of external service providers to IFRS 16-relevant data (inbound) and downstream departments, e.g. F&A (outbound)

Lease Application

• Selection and implementation of a suitable software solution

Contract analysis

• Analysis of the leasing portfolio, division into clusters
• Identification of embedded leases

Accounting options

• Advice on accounting policy decisions, e.g. short-term leases, low-value assets, interest rates, treatment of intra-group issues

Reporting

• Adjustment of intragroup reporting, e.g. charts of accounts, smart notes, package, budget, key figures

Data field model

• Identification of relevant data points (and data gaps) for the data field model in SAP RE-FX FL

Data migration

• Migration of relevant data points from different upstream systems into the leasing application

Specialist concepts

• Structuring of new requirements, e.g. new posting logic, asset accounting, account assignment plans, adaptation of the Group accounting guideline

Audit

• Supervision of the project-related audit by the group auditor
• Implementation concept, changes to the companies’ internal control system and internal control environment

Test management

• Compilation of exemplary test cases
• Coordination of the test phase up to the successful user acceptance test

Training

• Training of affected employees on the correct application of the new E2E leasing process

2) Orchestrating all sub-projects and achieving a “healthy” balance between benefits and costs

3) Realization of cost reduction potential through implementation of an optimized E2E leasing process

4) Realization of further benefits from the changeover:

• Systematic inventory of leasing contracts along with redesign of associated workflows and processes
• More transparency in the company
• Opportunity to negotiate more favourable purchasing conditions or renegotiate framework agreements with leasing companies
• Digitalization and electronic transmission of relevant information
• Greater transparency regarding utilized (or unutilized) assets
• Optimization of the leasing organization and the IT system landscape

• The implementation of the new lease accounting standards is not a “specialist project”, but a paradigm shift
• The “accounting change” requires the modeling and implementation of new contract management and leasing processes and has a significant impact on key financial performance indicators and almost all areas of the company
• Genuine change management is therefore essential in order to systematically and efficiently implement the requirements of the new lease accounting system